Carbon Reduction Commitment to Save Businesses £1 Billion by 2020

Hotels, banks, schools, local authorities and around 5,000 other large organisations could all be slashing their energy bills and carbon emissions as part of a new government initiative aimed at boosting energy efficiency and tackling climate change.

A new guide is published today by the Department of Energy and Climate Change to provide a helping hand to business to prepare for the introduction of the Carbon Reduction Commitment, which will begin in April 2010. The guide establishes who is covered by the scheme and guides the reader step-by-step through what they need to do to take part in the scheme.

Energy and Climate Change Minister, Joan Ruddock, said:

“Cutting back on energy use and becoming more energy efficient makes economic sense for firms at the best of times, but it’s even more important now given the difficult business environment.

“By taking measures to improve energy efficiency, businesses can slash their energy costs. The Carbon Reduction Commitment could help business save a total of £1billion by 2020, whilst also helping them play their part in the fight against climate change.

“The Carbon Reduction Commitment is part of a package of measures in the ground breaking Climate Change Act which will help mobilise 5,000 organisations to save over 4 million tons of CO2 a year, equivalent to taking a million cars off the road.”

The revenue raised from the scheme will be recycled back to participants on the basis of a league table -- so that those who are making most improvements in energy efficiency will be financially rewarded, and will receive recognition for their achievements.

The Government will further the roll out of the Carbon Reduction Commitment by launching a consultation today on the regulations which will form the basis of the initiative. Participating organisations will have to register with the Environment Agency who will administer the scheme.

The Government is already providing advice and financial incentives to help businesses take practical steps to improve their energy efficiency through the Carbon Trust and Climate Change Agreements.

Home improvement retailer, B&Q, is one such business that is already taking action to reduce their carbon footprint - Andy Francis B&Q’s Energy Manager says:

“As a responsible business, we wanted to demonstrate real reductions in our energy use and help from the Carbon Trust made this happen. Our new eco-store in Surrey uses a whole host of new technologies – including a green roof, wind turbine and movement sensitive lighting – generating around half the CO2 emissions of similar sized store.

“This new initiative will give financial rewards for greener businesses, so it makes both environmental and financial sense for us to reduce our emissions.”

Climate Change Agreements are voluntary agreements that lead to real reductions in CO2 emissions across sectors ranging from steel to chemicals, aerospace to brewing. Businesses which meet the targets under these agreements receive an 80% reduction on their Climate Change Levy.

These reductions have already helped to save 16.4 million tonnes of CO2, and estimated energy savings worth £1.5 billion and the Government is today launching a consultation on the next stage of the Climate Change Agreements Scheme.